Poland’s PGNiG in talks to get more gas from Norway through new Baltic Pipe

WARSAW/GDANSK (Reuters) -Poland’s PGNiG is in advanced talks to source more gas from Norway through the new Baltic Pipe linking the two countries, its chief financial officer said on Thursday, as it looks to replace Russian supplies.

The Baltic Pipe, which is set to begin operating in October, is the centrepiece of a Polish strategy to diversify away from Russian gas that began years before Moscow’s February invasion of Ukraine triggered a global energy crisis.

Poland was cut off from Russian gas supplies in April for refusing to pay in roubles.

“We are in advanced talks with several entities on the Norwegian Shelf,” PGNiG’s Przemyslaw Waclawski told reporters in answer to a question about volumes contracted for next year.

In an earlier call with analysts, a PGNiG representative said that 800 million cubic metres had been contracted for the fourth quarter of 2022.

Waclawski said that demand for gas and prices of the fuel at the end of the year will decide if 10 billion zlotys earmarked to compensate for the gap between surging market prices and regulated tariffs to shield household users will be enough.

PGNiG sells gas to industrial users in Poland at market prices, while vulnerable users including households and hospitals are protected by government regulated tariffs.

Waclawski spoke after PGNiG reported first half net profit of 4.84 billion zlotys ($1.1 billion), up 99% year on year.

The company said that it had seen a “radical shift” in its foreign gas supply sources, with the share of LNG imports and gas sourced from the west and the south rising.

It said first half gas sales rose 2% thanks to a one-off sale to the Government Agency for Strategic Reserves in March.

But excluding that, sales fell 3%, as high prices stifled demand.

($1 = 4.6206 zlotys)

(Reporting by Marek Strzelecki, Anna Koper and Gdansk Newsroom; writing by Alan Charlish; Editing by Uttaresh.V, Jason Neely and Alexander Smith)